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UK Privatisation Hasn’t Worked

Today I received a letter in the post informing me that my already expensive broadband was going up by another 6.6%, well above inflation by any measure. There doesn’t appear to be any real justification in the letter for this change, simply a restatement of the service I already receive. I am fortunate to live in an area that was fibre cabled to the property by NTL (acquired by Virgin) in the late 1990’s. Today I have an unlimited 200MB/s service, which means we stream content, download and generally access services without considering the amount of data we use. I also have a backup service on Zen Internet with fixed IP addresses that is a work connection for VPN connectivity to the lab and other things (like public cloud). This service is a mere 7Mb/s. I am never going to stop paying for my 200MB/s service!

Our exchange has conflicting views on whether it has been unbundled or not. Some websites say it has, with 21CN available; others indicate that Zen isn’t available from the exchange, even though I have it. Only Talk Talk and Sky offer LLU services from our exchange (allegedly), while uSwitch shows up to 76Mb/s from SSE, a deal that actually is only 17Mb/s when you redo the availability checker.

Broadband provision is a mess. For years, no company went up against BT and NTL/Virgin Media in our village because the BT service couldn’t complete. BT saw no reason to invest in our exchange. Virgin Media can increase their prices whenever they choose as there is no real competition. BT was privatised in 1985. We’ve had broadband since 1999. Why is competition still not there, some 30 years after BT became a private company? Now the government is having to invest money in the infrastructure to bring broadband to the masses. Unbelievably, BT is in most cases the preferred bidder (link – search on BT preferred Bidder Broadband for more examples). The government is effectively giving money to a private company to roll out a service they should have done in the first place.

The solution here was quite simple. Create a new government owned company, invest the money directly, competing against BT and the other providers. Once rollout has been done, float the company and let the market acquire it. This would stimulate competition in a stagnant and lazy market where the regulators don’t want to use their powers. The UK continues to lag other developed countries. Without positive government action, the lag will continue to increase.